How the Beer Oligopoly Apple Cart was Upset

^ Frank Appleton, Scottie McLellan, and John Mitchell at the Great Canadian Beer Festival in Victoria.

On July 26, 1980, Labatt, Molson, and Carling O’Keefe locked out their unionized workers on the threat of a strike, and stopped distributing beer in BC. Since the Big Three produced all the beer sold in the province at that time, their strategy was to create a beer drought that would turn the public against the unions. What they didn’t count on was John Mitchell.

Mitchell was co-owner and manager of the Troller Pub in Horseshoe Bay. It was a popular local, reminiscent of the pubs in his native England. The only thing missing was the flavourful Real Ale he had enjoyed in his youth. In contrast, what passed for beer in BC then was “pale yellow, bland, fizzy swill that embodied the Myth of the Three Cs—that beer must be cold, clear, and carbonated,” recalled Mitchell.

In the first couple weeks of the lockout, only cider was available for sale. Then, the Liquor Administration Branch imported beer from Washington state as a stop-gap, but that lasted for only three weeks before there was, again, no beer to be sold. Mitchell resolved to brew his own beer for Troller, an idea he had first read about in The Illustrated London News. However, due to tied-house restrictions, brewpubs were illegal in BC. This would have to be changed.

Mitchell first lobbied Allan Gould, General Manager of the BC Liquor Administration Branch. Gould was supportive, but advised him that a presentation would need to be given to the Minister of Consumer and Corporate Affairs, Peter Hyndman, if any amendments to the Liquor Control and Licensing Act were to be made.

^ John Mitchell and his son, Andrew, toast with the first pints of Bay Ale served at Troller Pub in June 1982.

Not being a brewer or familiar with brewery operations, Mitchell was at a bit of a loss as to how to proceed. But as luck would have it, Roger Cross, a Troller regular, passed along an article from The Harrowsmith Reader II written by Frank Appleton on the decline of Canadian beer quality and how to homebrew. Mitchell contacted him the following day and the two subsequently formulated a plan for Canada’s first brewpub to present to Hyndman.

In what Mitchell describes as a stroke of “incredible luck”, the brewpub concept was approved in the fall of 1981, but with a caveat in the amended legislation requiring a commercial road to separate the brewery and the pub. Nevertheless, it was enough for Mitchell to obtain a brewing license. Appleton then built the brewing system with used dairy equipment, trained Mitchell how to brew, and created the recipe for the Canada’s first craft beer since Prohibition — Bay Ale, an English bitter inspired by Fuller’s London Pride.

In June of 1982, Horseshoe Bay Brewery and Troller Pub served their first beer to the public. It was an instant success. Mitchell had calculated that they would need to sell one or two kegs a day to break even. Eight were sold on the first day. Within two weeks, they ran out of beer. With a capacity of producing 32 kegs per week, they struggled, and sometimes failed, to keep up with demand. Despite this success, MItchell’s business partners did not share his vision of being able to serve international visitors coming for Expo 86, something much better than “ersatz fizz”. Within a year, he and Appleton left, and the brewery was closed.

^ John Mitchell behind the bar at Spinnakers with the original four ales he created for the brewpub.

A chance meeting with Paul Hadfield at a private beer tasting in 1983 resulted in Mitchell being invited to help found Spinnakers in Victoria with another partner, Ray Ginnever. Mitchell had Appleton design the brewhouse, and with his help, created their first four ales — Spinnaker Pale, Mitchell’s ESB, Mt. Tolmie Dark, and Empress Stout. More regulatory hurdles at the municipal, provincial, and federal level needed to be overcome, but a year later on Saturday, June 16, the doors to Canada’s first in-house brewpub opened to the public.

Horseshoe Bay Brewery and Spinnakers not only inspired other entrepreneurs to follow, they pried us loose from the stranglehold of the Big Three. Thanks to John Mitchell, Frank Appleton, Peter Hyndman, and other pioneers, the foundation was established for a craft brewing industry that has significantly changed the manner in which beer is enjoyed in British Columbia today.

In 2001, Mitchell wrote in Brewed in Canada,

Still the optimist, I am looking for the spot where I can find good fellowship, marvellous food and cask conditioned Real Ale, in that order – and at a reasonable price. I am confident that sometime in this Twenty First century my aspirations will come true!